Advice for a newbie in the short term rental space?

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Advice for a newbie in the short term rental space?

Meghan Reed
Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes

My husband and I are under contract on our first STR in Old Saybrook, CT. We have two standard rental properties which we've owned for 5 and 6 years but feel like we have a lot to learn on this new venture. I'm trying to research as much as I can as quickly as possible to try and help our cash flow this year. Does anyone have advice they'd like to share?

Our plan is to furnish the property ASAP after closing (early Feb) then advertise the property. We have renovations that we'd like to do to really get the property in tip top shape but plan to do them over next winter to avoid being out of commission during the warmer months.

I'm not sure whether to use AirBNB or market it elsewhere. We're really trying to reduce the marketing and turnover fees as much as possible since we know we'll be in the red for a bit.  We live about an hour away from the new property so my husband and I plan do some of the management.

Thanks in advance for any guidance you'd like to share!

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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
5y

Hey @Meghan Reed, welcome to the vacation rental foray! So you want to reduce your marketing costs, which is pretty easy by using AirBNB and VRBO to market your property. The first year will be thin, but as you build up reviews (hopefully 5 star) you will get more and more. This won't really cost you anything other than setting up your place right.

How big is your home? Will it cater to families or couples or ?

Turnover costs are something that will always be with you. It is not the same as LTR's that you have. You will need a top notch cleaning team. Someone you can trust to get the house in tip top shape and clean as a whistle between guests. They will also be watching for damage and the like so get a good cleaner.

I would love to get some details on your place. How big etc. Then we can help with some of the nuances of vacation rentals. And don't be too nervous! Just come in here and search for answers. Plus ask away! We are here to help! 

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  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    5y

    Market it across every platform you can.  Market it towards people on vacation and people travelling for work.  I know this guy making a killing renting his 23 STRs to refinery contractors.  Contractors tend to be ruffians, so this guy is a ruffian too.

    0Reply
  • Rachel Campagnolo
    Rental Property Investor · Los Gatos, CA · Member since 2020 · 9 posts · 6 votes
    5y

    Hi Meghan - love that area on CT - so beautiful! There's a very active AirBnB owners group on FB that I think you'd find useful. Not to deter from BP, but another option for education and discussion.  Most list primarily on AirBnb and VRBO.. and there's of course many others.  Also, AirDNA is a great resource to understand the market, occupancy and rates.  Wishing you the best of luck!!

    1Reply
  • Meghan Reed
    OP
    Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes
    5y

    Thank you @Paul Sandhu and @Rachel Campagnolo so much for the recommendations!  I get a little nervous each time we go under contract on a new property but this one is really making me uneasy just because I need to figure out a whole new rental game.  I really appreciate the advice!

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Meghan Reed, welcome to the vacation rental foray! So you want to reduce your marketing costs, which is pretty easy by using AirBNB and VRBO to market your property. The first year will be thin, but as you build up reviews (hopefully 5 star) you will get more and more. This won't really cost you anything other than setting up your place right.

    How big is your home? Will it cater to families or couples or ?

    Turnover costs are something that will always be with you. It is not the same as LTR's that you have. You will need a top notch cleaning team. Someone you can trust to get the house in tip top shape and clean as a whistle between guests. They will also be watching for damage and the like so get a good cleaner.

    I would love to get some details on your place. How big etc. Then we can help with some of the nuances of vacation rentals. And don't be too nervous! Just come in here and search for answers. Plus ask away! We are here to help! 

    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    5y

    Best advice is to read through this forum. If you have a question it will likely have been asked and answered many times already. 

    I would advertise on Vrbo also. I get 85% of my bookings from Vrbo and only a handful from Airbnb.

    0Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Meghan Reed happy to hop on a call sometime with you and/or your husband. That would be more efficient. Just send me a pm if interested. Happy to help and I have nothing to sell. There’s a ton of info here on BP you can read. We’re also a helpful bunch if I do say so myself. Reach out if you want to connect.

    0Reply
  • Account Closed
    Rental Property Investor · Escondido, CA · Member since 2018 · 268 posts · 137 votes
    5y

    @Meghan Reed, I'm new to the STR space also. For my first deal, I was fortunate to partner with someone who's already successfully running another STR. That said, I have some suggestions from the experience so far: First, besides getting the place furnished, are there other things you'll need done to the property prior to renting? If so, start coordinating those tings now so that you don't lose any time. With the cabin we bought, it needed a furnace which required coordinating with HVAC, propane, electrician, and county inspection. Your goal should be trying to make any needed repairs, cosmetic improvements, etc. happen right after taking title.

    The other advice I might offer is to start familiarizing yourself with the platforms, Airbnb and VRBO at least, and building your listing in advance. Learn to navigate the sites. Get any template messages ready. Create guidebooks, attachments, etc. now. You can have your listing pretty much ready to go live, just waiting on staged photos. 

    1Reply
  • Kim Synow
    Flipper/Rehabber · Everett, wa 98201 · Member since 2021 · 12 posts · 11 votes
    5y

    Hello and Happy New Year! I don't have suggestions regarding your question, however, I DO have suggestions regarding running your STR. For 5 years we managed on of Seattle's biggest AirBnB hosts. He had 10 12 sleeper ultra modern properties that he rented. He was the highest rated host on the site in Seattle.

    One of your biggest challenges will be to find staff to clean your turns unless you plan on cleaning your turns yourself. This sounds easier than it actually is. If you'd like help, reach out to me and I can give you as much info as you need. 

    Good luck to you in this endeavor! It's not as easy as it sounds, but it can be worth it if you know how to play the STR game.

    0Reply
  • Meghan Reed
    OP
    Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes
    5y

    Hi @Michael Baum, the house is about 1100 sq. ft.  It's currently somewhat boxy (separate living room, kitchen, den, porch etc.) We have plans to do renovations to make it a more open floor plan, upgrade the kitchen and bathrooms, etc. over next winter.  For this year we plan to book it as is outside of minor cosmetic updates.  It's located right down the street from the beach, definitely walking or biking distance and has a marsh directly behind it.  I think the backyard is nice as is but we plan to make it really top notch in time with a large patio and fire pit.  We really want the outside space to wow people.  Beyond the marsh you can see houses on the water and beautiful sunsets.

    We definitely think that families will be our main guests.  The house has 3 bedrooms and 1.5 bathrooms inside with an outside shower though we want to add another shower inside when we do the renos.  What I think is one of the coolest features of the home is that the closets in the upstairs bedrooms are large enough that they definitely can be made into great sleeping spaces for kids.  They are both in knee walls as the house is a cape and one of them extends into the ceiling above an added porch.  We plan to do built in bunk beds and some really cool decor such as possibly making it seem like the inside of a ship.

    0Reply
  • Meghan Reed
    OP
    Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes
    5y

    Thanks everyone who has provided advice thus far.  I'm already spending a lot of time researching and will be doing a heck of a lot more as time goes on.  There's so much to learn but this is a really exciting new adventure for us!

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    @Meghan Reed From a marketing perspective, there are other ways to get tenants who would stay longer and you won't have to spend too much on marketing. 

    You can consider calling the local hospitals to see if they have travel nurses or doctors who need a place to stay. This is one of many ideas to really help your turnover, as we know turnover costs can really bite into cashflow when it comes to STRs.

    Good luck to you and your husband.

    2Reply
  • Filipe Pereira
    Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    Congrats on going under contract on another property @Meghan Reed! Love seeing local CT folks on the forums doing big things. The easiest will be AIRBNB (but like you said - at a cost). I am a fan of the travel nurse option as they typically stay a few months and usually you can get more $ by renting out per room. Plus, I'm sure you and your husband would prefer to minimize your trips down there!

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Looks like a cute place @Meghan Reed. How much are you looking to spend on the reno? Frankly I am not sure I would go nuts on a full renovation with removing walls an the like. If you are keeping it as a vacation rental I am not sure you will get that much more of a nightly rate that would pay for the renovation.

    Have you looked up places that are close to you in regards to nightly rate? If you got an extra $50 per night on a $50k dollar reno, you might want to rethink that. I am not sure you would get that investment back in the rentals. Maybe in the resale though.

    So there aren't a ton of rentals in the Old Saybrook area. I check VRBO and the average nightly rate on a home your size was about $200 a night. That does include water front locales and some places that are much larger. You will need to remove some of the outliers, like the ones that are 2400sqft and $2000 a night. Calendars are spotty on the more expensive places (over $300 a night), but the lower priced ones, non-waterfront, look like they are getting booked out. Most are over 50% for the summer season.

    0Reply
  • Luke G.
    Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
    5y

    Schedule a call with @Luke Carl.  He helped me a ton get my processing rolling for my cabin.

    1Reply
  • Meghan Reed
    OP
    Investor · West Suffield, CT · Member since 2013 · 106 posts · 42 votes
    5y

    Thanks again for all the info @Michael Baum.  When everything is said and done on the reno we probably will end up spending close to $50k but we're definitely interested in the resale as we may upgrade in a handful of years.  We really want to make the place a great space for us and our extended family as well so we're OK if it doesn't fully pay off in the short term.

    0Reply
  • Cody Woods
    Member since 2020 · 11 posts · 3 votes
    5y

    Congrats @Meghan Reed!  Just a couple of things from my experience...

    I agree to go on multiple platforms.  I tried Airbnb, Vrbo and Booking and found Booking to be a pain and not used in my area so I dropped it.  I get about 90% from Airbnb and 10% from Vrbo.  

    I'm not sure why people talk about the turnover costs... I actually prefer to have people stay shorter times because they damage less, use less, and have less time to nitpick at anything they might find.  They are paying for the cleaning (I charge $105 and the housekeeper charges me $85, the rest goes towards their consumables).  Just a different perspective.  

    I use Smartbnb to automate my messaging.  The templates they have are a good start.  I just have 5 standard messages: Initial welcome, check in instructions a week before they arrive, a quick check-in the morning after they arrive and check out instructions the night before they leave.

    I use Pricelabs to automate my pricing (although Vrbo isn't fully automated yet).  

    I use Turnoverbnb (free version) to automatically let my housekeeper know when a new booking comes in.  

    Best of luck!

    0Reply
  • Donna Boyd
    Member since 2020 · 1 post · 0 votes
    5y

    Like a lot of people had said already, put your property on every channel to get the most exposure (airbnb, vrbo, all of them). Use a property management software to hellp manage them (I work at Hostfully and would love to tell you more about them, just message me). Guidebooks also help you be more efficient with sharing property info with guests, upselling, as well as booking future stays. I always start with a low daily price to get more customers and 5 star reviews before I increase the price. With software, you can update all the prices (and other details) all in one place.

    0Reply
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